The Conference Board’s Consumer Confidence Index for June retreated to 121.5 after 131.3 in May (previously 134.1), reaching its lowest level since 120.6 in September 2017. Although confidence in current conditions remained elevated, the 162.6 in June was an 8.1 drop from 170.7 in May and reflected less optimism about the labor market. The six-month expectations index fell 10.9 points to 94.1, its lowest since 89.4 January when consumers saw the outlook blighted by a slowing economy — at home and abroad — and the political impasse that produced a 35-day partial federal government shutdown. At the moment it is uncertainty about the impact of trade and tariff policy and worsening relations in a few political hotspots that make the future look significantly less positive relative to the past two years.
Contributions to the index show only a meager positive from present business conditions, while present employment suddenly looked much less secure. Expected business conditions worsened sharply, and there was a noticeable downturn for expectations for employment and personal income.
The June numbers point out that any confidence recovered after the initial turnaround after the end of the federal government shutdown has been wiped out and then some. If consumers had started to take the prospect of somewhat slower economic growth in stride, the antagonism and belligerence in the latest talk about trade and tariffs have badly cut into consumers’ hopeful mood. Confidence remains good for now, but there are warning signs the heights may be over.
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